Property Grunt

Tuesday, November 14, 2006

Broker Ettitqutte Part 1

Several weeks ago I received an email from a reader regarding broker ettitqutte. Apparently the reader was having trouble trying to get a straight answer from a broker which proved to be quite irritating. Being the helpful guy that I am open, I offered to shed some insight on the situation. Below is the initial email and my response. I have edited the content to protect all parties involved.

I'm noticing that more and more brokers will respond to email requests with a phone number and a message to call.

Should I strongly demand a reply, or leave a message with the property owners to the effect that the broker is not helping their cause?

Second question revolves around regulations and politeness. When I ask for an approximate size regarding an apartment, I realize that the number is an estimate, often based on a plan, or an architects estimate or the apartment's current owners perceptions. I always characterize my question as an attempt to get an estimate. In this slower market, I'm suddenly being told that REBNY forbids any estimates. I also notice that I can always get an estimate when the price per sf is a selling point. Again, what is the best way to get what I need to help make a decision? Is it rude to let the current owner know that the broker is not helping?

Below is my response.

Thank you for reading my blog. I understand your aggravation and I hope shedding light on the situation will it make it easier for you to navigate the mind of a broker and this insane market. I do have to laugh since etiquette and broker don't exaclty go hand in hand.

First of all ads serve as lead generators for brokers. The moment you contact a broker is all the broker needs to develop a rapport with you. There are three reasons why the broker wants that rapport. First, they want a direct buyer for their listing. A direct buyer means a bigger commission for themselves, which they only have to split with the house. That is the goal of every broker with an exclusive especially during these times.

The second reason is because the possibility looms that you will not like the exclusive listing which is alright. By showing their exclusive they have established credibility and will continue to pursue a relationship with you representing your buying needs.

The third reason is because they want to pre-qualify you. They want to have an idea of who you are. Are you worth their time? Do you have the money to buy this apartment or are you just spinning your wheels.

This can't be done through email. They need to actually meet you in person or on the phone.

Square footage is a tricky issue. I usually leave that to the appraiser and if buyers press me on the issue, I point to the floorplan and let them come to their own conclusions. The reason is that if brokers misquote square footage in residential sales they could be sued, which is something all brokers like to avoid. And I think it is best to get a more objective opinion rather than the exclusive broker.

If you want to get a better idea of the square footage, I think it is best to go there and measure it yourself or have someone with experience in measuring square footage to do the honors. If a broker objects, just ask if they are hiding something and that it has to be measured anyway for the mortgage. AND WHEN YOU DECIDE TO PURCHASE AN APARTMENT REMEMBER TO GET THE MORTGAGE CONTINGENCY INSURANCE. THERE ARE PLENTY OF TRUE STORIES OF BUYERS LOSING THEIR DOWN PAYMENT BECAUSE THE APARTMENT UNDER APPRAISED. AND YOU CAN SEE HOW SERIOUS I AM BECAUSE I AM WRITING IN CAPS.

As for this thing about RBENY forbidding square footage to be reported, I have never heard of that one. And even if it is true, I am not sure why the board would even implement that law.

As for what to do about a broker who either is really stupid or just plain sneaky? It is really up to you to inform the seller that their representation leaves something to be desired. It also depends on what you experienced. If the broker was downright rude, obnoxious and racist, a complaint is definitely in order. You might also want to complain to their manager. If you do complain to the seller they will eviscerate their broker from crotch to gullet. They might even lose the exclusive. Will it speed up the buying process? Perhaps not. Maybe the seller will be annoyed at you or appreciate your input. I don't know. It really depends on the person.

In part 2 I get analyze the correspondence between the two parties. Dr. Phil would have a field day with the broker.